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Institutional Affiliation: MIT
NBER Working Papers and Publications
|February 2019||The Efficiency and Distributional Effects of Alternative Residential Electricity Rate Designs|
with Scott P. Burger, Christopher R. Knittel, Ignacio J. Pérez-Arriaga, Frederik vom Scheidt: w25570
Electricity tariffs typically charge residential users a volumetric rate that covers the bulk of energy, transmission, and distribution costs. The resulting prices, charged per unit of electricity consumed, do not reflect marginal costs and vary little across time and space. The emergence of distributed energy resources—such as solar photovoltaics and energy storage—has sparked interest among regulators and utilities in reforming electricity tariffs to enable more efficient utilization of these resources. The economic pressure to redesign electricity rates is countered by concerns of how more efficient rate structures might impact different socioeconomic groups. We analyze the bill impacts of alternative rate plans using interval metering data for more than 100,000 customers in the Chicago...